In today's market, homebuyers need to be quick

Standing in front of their dream home are first-time home buyers Matt and Olivia Kush of Macomb Township. Photo courtesy of Matt Kush.

Matt and Olivia Kush are first-time homebuyers but they’re also trendy millennials who skipped the starter home and went looking for their dream house.

“Why make the investment in a home, financially and time wise if you’re just going to have to do it all again five years from now,” said Matt Kush, 32, of Macomb Township.

Matt is the music and creative development director at St. Isidore Church. Olivia, 26, works as a speech pathologist for Chippewa Valley Schools.

They married two years ago and have been renting a condominium since then.

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With their lease coming due this past May, they decided it was time to buy a house.

Unlike generations of the past, who may have started off small and worked their way up, they decided to look for a home that suited their lifestyle now but would also fit their needs as a family, once they started having children.

“We looked for something that wasn’t a fixer-upper because we’re both very busy and don’t have time for that,” Kush said.

What they found was a 2,000-square-foot ranch with a modern kitchen, as Schneider observed, with stainless steel appliances, hardwood floors and granite countertops. Their home also has three bedrooms and four bathrooms, plus a finished basement, so even that’s not a worry when they start expanding the family.

“In hindsight, we really didn’t allow ourselves the time to shop around,” Kush said. “There weren’t a lot of options and it’s really not a good time to buy – but we used a lot of apps (Zillow and Trulia) and technology (online real estate sites) to help us find the home we wanted.”

They bid on the first home they looked at but were too late. After looking at 20 homes, they found a home they love.

We were looking at spending between $270,000 and $320,000. The home we found was a little bit outside of that but we knew that we could do it,” Kush said. “We feel like we got a great home and are very happy with it.”Like the Kushes, buyers in today’s market have to be persistent and quick.

Seven months into the year, the mantra for real estate buyers is, “if you snooze, you lose.”

Houses are moving fast when they go up for sale because there’s a shortage of homes for sale. So fast, in fact, that there’s sometimes no time to put up a for-sale sign, or a sold sign.

“Normal is two to four weeks,” said Jenifer Rachel, a broker with Keller Williams in Clarkston. “In our current market, the houses have been on the market two to four days. If you can’t get in right away, you miss your chance.”

Hot Market

In Oakland and Macomb counties, and Wayne County outside of Detroit, sales are down a bit, but Realtors say that’s because there’s a shortage of houses on the market.

Comparing this June to the same month a year ago, sales were down 1.6 percent in Oakland County to 2,195; decreased 3.6 percent in Macomb County to 1,505; and declined less than 1 percent to 1,723 in Wayne County excluding Detroit.

Median sales prices, perhaps predictably, were up 10.7 percent to $249,000 in Oakland County; increased 8.8 percent to $163,500 in Macomb County; and jumped 7.7 percent to $147,500 in Wayne County, excluding Detroit.

Listings in June were down 32.4 percent to 4,565 in Oakland County; dropped 48.7 percent to 2,176 in Macomb County; and fell 35.9 percent to 2,782 in Wayne County excluding Detroit.

Houses don’t stay on the market for long. The average days a house was on the market was down 25.7 percent to 26 days in Oakland County, down 36.8 percent to 24 days in Macomb County, and down 21.2 percent to 26 days in Wayne County, excluding Detroit.

Realcomp, southeast Michigan’s multiple listing service, listed 38 communities in the region that had homes on the market for an average of 30 days or less.

Nineteen of them were in Oakland County. Homes sold the fastest in Farmington, an average of 17 days, and in Holly Village, an average of 18 days. In Macomb County, homes were on the market an average of 28 days in Sterling Heights.

“It’s the shortest days on market I’ve seen in 11 years in the business,” Rachel said. “We’re down 50 percent of listings on the market from 10 years ago.”

Many Reasons

A low numbers of homes for sale is partially a result of the housing crash a decade ago, when prices plummeted and the market virtually halted.

“Instead of buying up, people renovated and stayed where they were to keep the payments low,” Rachel said. “People are trying to build back their equity they lost in ‘08, ‘09, ‘10, and ‘11.”

There is also less new housing being built because there’s a shortage of skilled contractors.

“Builders want to build but contractors left to get jobs,” Rachel said. “Contractors are pulling a high wage, pulling the price up on residential buildings and there’s not enough of them.”

Aside from a shortage of houses for sale, price increases are also driven by demand from millennials – that age group under 35.

“We would definitely say that the market is swinging toward the millennials buying,” said Jeanette Schneider, vice-president of REMAX Southeast Michigan.

But what’s different for millennials compared to other generations is that there’s also a shortage in what would be considered smaller starter homes.

In the past most first-time home buyers stuck with a starter home, typically a smaller home or older home that could be fixed up and sold for a profit which could then be used to purchase a second, bigger home later.

Such was the trend among Baby Boomers and Generation X.

“But not with the millennials,” Schneider said. “They are willing to take on a larger square-footage and bigger mortgage payment to get exactly what they want.”

What millennials are looking for, among other things, is a couple bathrooms, a modern kitchen with marble or granite countertops and hardwood floors.

“They don’t want to upgrade,” Schneider said. They’ll do some creative things with a house like using pennies under epoxy to cover a floor. “But as a whole they generally want a turnkey purchase.”

Rachel, at Keller Williams, agreed.

“Millennials would like to buy but there’s not enough inventory to get in the market,” she said. “Those with good downpayments are purchasing the next step up, not what we would consider a starter home.”

For those who want a starter home in Macomb County, they can be found in areas such as Warren, $70,000 to $149,000, Roseville, $80,000 to $85,000, St. Clair Shores, $120,000 to $160,000, and Sterling Heights, $170,000 to $214,000.

In Oakland County, based on days on the market, homes in the older communities that ring Detroit are moving the fastest, including Berkley, Ferndale, Clawson, Lathrup Village, Madison Heights, Pleasant Ridge, Hazel Park, and Oak Park. But they’re also moving fast in Troy, Auburn Hills and South Lyon.